Major automakers such as General Motors, Ford Motor Co. and Volvo Cars deepened ties with key technology partners this week to gird for the upcoming fights against Tesla and Apple.
Three chip firms -- Intel Corp.'s Mobileye, Qualcomm Inc. and Nvidia Corp. -- emerged from a raft of announcements at the CES in Las Vegas in locking down the brains of self-driving cars for the next decade.
The deals involve consolidating scores of older, slower chips into more powerful centralized computers. But to win them, the chip firms have had to consent to letting automakers control key parts of the technology.
For automakers facing Apple and Tesla, the stakes are high. In addition to electrifying their models, automakers are essentially designing computers with increasing self-driving capabilities.
That means a big opportunity for automakers to make money off software and services in cars long after vehicles roll off a dealer's lot, but only if they can keep the customer relationships and data for themselves, the way that Tesla and Apple do.
Automakers "that haven't been the pioneers are finally realizing they're going to be left in the dust if they don't change their approach," said Danny Shapiro, vice president, automotive for Nvidia, a maker of high-powered chips.
Nvidia this week announced deals to supply the electronic brains for future models from several Chinese EV startups, and is working with other automakers including Mercedes, Hyundai Motor Co., Volvo and Audi .
Control of technology and data are areas of tension between automakers and technology companies, Shapiro said. "Control and customization, and who owns the data?"
The answer is complex because of the staggering amount of technology required to make cars drive themselves.
These include computer vision algorithms to help cameras recognize pedestrians, sprawling high-definition maps of the world's roads, and "drive policy" software to make millisecond decisions about how the car should behave when confronted with the unexpected.
For chipmakers, this means they need to have every aspect of the technology ready, but be willing to let customers pick and choose.
Qualcomm, for example, spent $4.5 billion last year to purchase Veoneer Inc. to round out all the pieces of software needed to complement its self-driving car chips. But after winning its first major self-driving chip contract with GM this week, those software assets will not be included because GM has its own.
"Our software stack is all internally developed. So we're not taking their pieces," said Jason Ditman, chief engineer for GM's forthcoming Ultra Cruise hands-free driving product.